Unemployment Legislation – Signed 6/24/09

Governor Bredesen recently signed legislation altering the state unemployment wage limit and implemented a temporary fee, with a retroactive date of January 1, 2009. The unemployment wage limit has increased from $7,000 to $9,000. The additional $2,000 in wages can be recognized on the second quarter returns as long as all of the employees that were paid in the first quarter were also paid in the second quarter. If you have employees that were not paid in the second quarter, the first quarter return must be amended to account for the additional taxable wages.

In addition to the wage limit increase, each employer will also be assessed a temporary additional fee of 0.6% on all taxable wages. The state will be sending employers a bill for the 0.6% fee for the first quarter taxable wages as originally reported. This amount can be paid until July 31, 2009, without incurring any penalties.

The state is in the process of sending out a letter to all employers explaining these changes as well as a revised quarterly reporting form (Form LB-0456). For a copy of the letter being sent to employers you can visit http://tn.gov/labor-wfd.

If you have questions or would like to discuss the impact of these changes on your business, visit the LBMC Tax Web page or contact us directly.

Lattimore Black Morgan & Cain, PC
615-377-4600
info@lbmc.com